We offer innovative solutions and value added services for metal recycling, reusing and reducing.
Your preferred partner for steel solutions
We uphold ourselves with professionalism, honesty and sincerity to deliver what we promised through adopting best practices.
We are trusted and reliable partner to all our clients.
We deliver what we promise.
TEAM WORK AND BONDING
We practice effective and open communication and seek co-operation and collaboration among all team members to achieve desirable goals.
PROGRESS AND GROWTH
We are self-driven, passionate and responsible for our work to achieve the expected Key Performance Indicators through continuous learning and upgrading of knowledge and skills.
We always look for ways to do things effectively and efficiently.
We embrace change with courage, flexibility and adaptability.
Union Steel Holdings Limited (“Company”) and its subsidiaries (collectively, the “Group”) are committed to set corporate governance practices in place which are in line with the recommendations of the Code of Corporate Governance 2018 (“Code”) to provide the structure through which the objectives of protection of shareholders’ interest and enhancement of long term shareholders’ value are met.
This report describes the corporate governance practices adopted by the Company for the financial year ended 30 June 2021 with specific reference made to each of the principles of the Code. The Company has complied substantially with the requirements of the Code and will continue to review its practices on an ongoing basis. It has provided an explanation for any deviation from the Code, where applicable.
Board's Conduct of its Affairs
Principle 1: The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.
The Board’s primary role is to protect and enhance long-term shareholders’ value. Its responsibilities are distinct from Management responsibilities. It sets the overall strategy for the Group and supervises executive Management. To fulfil this role, the Board sets strategic direction, establishes goals for Management and monitors the achievement of these goals, thereby taking responsibility for the overall corporate governance of the Group.
In addition to its statutory duties, the principal functions of the Board are:
All Directors objectively discharge their duties and responsibilities at all times as fiduciaries and take decisions in the interests of the Company.
To assist in the execution of its responsibilities, the Board has established a number of Board Committees, namely the Audit Committee (“AC”), the Nominating Committee (“NC”) and the Remuneration Committee (“RC”) (collectively “Board Committees”). These Board Committees function within clearly defined terms of reference and operating procedures, which are reviewed on a regular basis to ensure their continued relevance. The effectiveness of each Board Committees is also constantly monitored.
The Board currently holds at least 2 scheduled meetings each year. In addition, it holds additional meetings at such other times as may be necessary to address specific significant matters that may arise. Important matters concerning the Group are also put to the Board for its decision by way of written resolutions. The Company’s Constitution has provision for Board meetings to be held via telephone or videoconference.
The following table discloses the number of meetings held for Board and Board Committees and the attendance of all Directors for the financial year ended 30 June 2021:
The Board has adopted a set of internal guidelines setting forth matters that require Board approval. Matters which are specifically reserved for the Board’s decision are those involving significant acquisitions, disposals and financing proposals, reviewing and approving the Group’s corporate policies, monitoring the performance of the Group and transactions relating to investment, financing and legal and corporate secretarial. The Management understands that these matters require approval from the Board. The Board will review these internal guidelines on a periodic basis to ensure their relevance to the operations of the Company. Directors are required to act in good faith and discharge their fiduciary duties and responsibilities in the interest of the Company at all times.
The Directors are also updated regularly on changes to the Singapore Exchange Trading Securities Limited (“SGX-ST”) listing rules, risk management, corporate governance, insider trading and the key changes in the relevant regulatory requirements and financial reporting standards and the relevant laws and regulations to facilitate effectively discharge of their fiduciary duties as Board or Board Committee members.
News releases issued by the SGX-ST and the Accounting and Corporate Regulatory Authority (“ACRA”) which are relevant to the Directors are circulated to the Board. The Company Secretaries would inform the Directors of upcoming conferences and seminars relevant to their roles as Directors of the Company. Annually, the independent auditor (“EA”) update the AC and the Board on the new and revised financial reporting standards that are applicable to the Group.
The Company has an orientation programme for all new Directors and also for Directors to attend any appropriate training programme in order to discharge their duties as Directors.
Directors are encouraged to attend seminars and receive training to improve themselves in the discharge of Directors’ duties and responsibilities. Changes to regulations and accounting standards are monitored closely by the Management. To keep pace with such regulatory changes, the Company provides opportunities for ongoing education and training on the Board processes and best practices as well as updates on changes in legislation and financial reporting standards, regulations and guidelines from the SGX-ST Listing Rules that affect the Company and/or the Directors in discharging their duties.
Newly appointed Directors will be briefed by the Management on the business activities of the Group, governance policies, policies on disclosure of interests in securities, the rules relating to disclosure of any conflict of interest in a transaction involving the Company, prohibitions in dealing in the Company’s securities and restrictions on disclosure of price sensitive information. In addition, the Management regularly updates and familiarises the Directors on the business activities of the Company during the Board meetings.
A formal letter of appointment would be furnished to every newly appointed Director upon their appointment explaining, among other matters, their roles, obligations, duties and responsibilities as member of the Board.
Board Composition and Guidance
Principle 2: The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company.
Presently, the Board comprises two (2) Executive Directors, one (1) Non-Executive Director and three (3) Independent Directors:
There is presently a strong independent element on the Board. Half of the Board is made up of Independent Directors and the independence of each Director is reviewed by the NC. The criteria for independence is determined based on the definition as provided in the Code and the independence of each Director is reviewed annually by the NC. The Board considers an Independent Director as one who has no relationship with the Company, its related companies, its substantial shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors’ independent business judgment of the Group’s affairs. The NC has reviewed the independence of each Independent Director and is of the view that these Directors are independent.
The NC has conducted a rigorous review on the independence of the Independent Director, Mr. Siau Kai Bing and has considered that Mr. Siau Kai Bing is independent even though he has served on the Board beyond 9 years. The relevant factors that were taken into consideration in determining the independence of Mr. Siau Kai Bing are set out in Principle 4 below. Having considered the relevant factors, the NC had determined that Mr. Siau Kai Bing has demonstrated strong independence in character and judgement over the years in discharging his duties and responsibilities as an Independent Director. His continued presence as an Independent Board member will ensure best practices being followed and provide effective oversight and compliance with good corporate governance.
Accordingly, the NC had recommended to the Board that he continues to be considered independent, notwithstanding he has served on the Board for more than nine years from the date of his first appointment. Mr. Siau Kai Bing, being a NC member, abstained from any discussion and voting on the matter.
The Board had concurred with the NC’s assessment. As the Company will adopt the two-tier voting process ahead of the Rule 210(5) (d)(iii) of the Listing Manual of the SGX-ST coming into effect on 1 January 2022, Mr. Siau Kai Bing will be subject to the two-tier voting process in connection with his re-election and continued appointment as independent director at the forthcoming annual general meeting.
The NC reviews the size and composition of the Board and Board Committees of the Company to ensure that the size of the Board and Board Committees are conducive for effective discussions and decision-making and that the Board and Board Committees have the appropriate mix of skills, knowledge and experience as well as an appropriate balance of Independent Directors. The NC, with the concurrence of the Board and Board Committees, considers that the present Board size and number of Committees facilitate effective decision-making and are appropriate for the nature and scope of the Company’s operations. The Board will constantly examine its size with a view to determining its impact upon its effectiveness.
The Directors appointed are qualified professionals who, as a group, possess a diverse range of expertise to provide core competencies such as accounting or finance, business or management experience, legal and regulatory, and industry knowledge, which combined, provides core competencies necessary to lead and govern the Group effectively. The Directors’ objective judgment, collective experience and knowledge are invaluable to the Group and this has allowed for the useful exchange of ideas and views.
The Non-Executive Director and Independent Directors exercise no management functions in the Group. The role of the Non-Executive Director and Independent Directors is particularly important in ensuring that the strategies proposed by Management are fully discussed and rigorously examined and reviewing the performance of Management in meeting agreed goals and objectives and monitor the reporting of performance.
The Company co-ordinates informal meeting sessions for the Non-Executive Director and Independent Directors to meet on a need-basis without the presence of the Management to discuss matters such as the Group’s financial performance, corporate governance initiatives, Board processes, succession planning as well as leadership development and the remuneration of the Executive Directors.
Profiles of the Board are set out in “Board of Directors” section of this Annual Report.
Chairman and Chief Executive Officer ("CEO")
Principle 3: There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making.
Mr. Ang Yu Seng, the Executive Chairman and CEO, is also the controlling shareholder of the Company, takes an active role in the Management of the Group.
The responsibilities of the Chairman include:
The Company Secretaries may be called to assist the Chairman in any of the above. As the CEO, Mr. Ang Yu Seng is responsible for the overall management, strategic direction, ensuring that its organizational objectives are achieved and the day-to-day operations of the Group.
The Board had appointed Mr. Siau Kai Bing as the Lead Independent Director to co-ordinate and to lead the Independent Directors to provide a non-executive perspective and contribute to a balance of viewpoints on the Board. He is the principal liaison on Board issues between the Independent Directors and the Executive Chairman. He is available to shareholders when they have concerns or contact through the normal channels of the Executive Chairman and CEO / Group Finance Manager has failed to resolve or is inappropriate.
The Independent Directors, led by the Lead Independent Director, meet amongst themselves without the presence of the other Directors where necessary and the Lead Independent Director will provide feedback to the Chairman after such meetings.
Principle 4: The Board has a formal and transparent process for the appointment and re-appointment of directors, taking into account the need for progressive renewal of the Board.
The Board, through the delegation of its authority to the NC, has endeavoured to ensure that Directors appointed to the Board possess the relevant background, experience and knowledge in business, finance and management skill to enable the Board to make effective decisions.
The NC comprises two (2) Independent Directors and one (1) Executive Director as follows:
Ms. Tan Min-Li (Chairman)
Mr. Ang Yu Seng
Mr. Siau Kai Bing
Based on the written terms of reference approved by the Board, the principal functions of the NC are:
The NC is responsible for identifying and recommending new Directors to the Board, after considering the necessary and desirable competencies. In selecting potential new Directors, the NC will seek to identify the competencies required to enable the Board to fulfil its responsibilities. The NC may engage consultants to undertake research on, or assess, candidates applying for new positions on the Board, or to engage such other independent experts, as it considers necessary to carry out its duties and responsibilities. Recommendations for new Directors are put to the Board for its consideration.
New Directors are appointed by way of a Board resolution following which they are subject to re-election at the next AGM.
The Company’s Constitution requires one-third of the Board (except for the Managing Director) to retire by rotation at every AGM. Directors who retire are eligible to offer themselves for re-election. Pursuant to Regulation 97 of the Company’s Constitution, Directors of the Company who were newly appointed by the Board since the last AGM will have to retire at the forthcoming AGM.
In considering whether an Independent Director who has served on the Board beyond 9 years is still independent, the Board has taken into consideration the following factors:
In this regard, the NC has conducted a rigorous review of the suitability of Mr. Siau Kai Bing being the Independent Director who has served on the Board beyond 9 years and has determined that Mr. Siau Kai Bing remains independent. Mr. Siau Kai Bing had abstained from voting on any resolution in respect of his own appointment. In addition, the NC is of the view that Mr. Wong Loke Tan and Ms. Tan Min-Li are independent (as defined in the Code) and are able to exercise judgement on the corporate affairs of the Group independent of the Management.
Under the Listing Rule that will come into effect 1 January 2022, the appointment of independent directors who have served an aggregate period of more than nine years will be subject to a two-tier voting process to be approved by the majority of (i) all shareholders and (ii) all shareholders, excluding shareholders who also serve as directors or the CEO (and their associates). The two-tier voting process will be valid for a term of the independent director appointment (up to three years).
Mr. Siau Kai Bing had voluntarily offered himself to be subject to the two-tier voting process. The Company will adopt the two-tier voting process ahead of the Rule 210(5)(d)(iii) of the Listing Manual of the SGX-ST coming into effect on 1 January 2022 and table the respective resolutions proposing the re-election and continued appointment of Mr. Siau Kai Bing as independent director at the forthcoming AGM.
Despite some of the Directors having other Board representations, the NC is satisfied that these Directors are able to and have adequately carried out their duties as Directors of the Company. Currently, the Board has not determined the maximum number of listed Board representations which any director may hold. The NC and the Board will review the requirement to determine the maximum number of listed Board representations as and when it deems fit.
There is no alternate Director being appointed to the Board for the financial year ended 30 June 2021.
The NC has recommended to the Board that Mr. Siau Kai Bing and Ms. Tan Min-Li be nominated for re-election under Regulation 91 of the Company’s Constitution at the forthcoming AGM. The Board had accepted the NC’s recommendation.
Each member of the NC shall abstain from voting on any resolutions in respect of his or her re-nomination as a Director.
The key information regarding Directors such as academic and professional qualifications, Board Committees served, directorships or chairmanships both present and past held over the preceding three years in other listed companies and other major appointments, whether the appointment is executive or non-executive are set out in “Particulars of Directors pursuant to the Code of Corporate Governance” in the Annual Report.
Principle 5: The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its board committees and individual directors.
While the Code recommends the NC being responsible for assessing the Board as a whole and also the individual evaluation of each Directors’ contribution, the NC is of the view that it is more appropriate and effective to assess the Board as a whole, bearing in mind that each member of the Board contributes in different way to the success of the Company and Board decisions are made collectively.
The NC has established a review process to assess the performance and effectiveness of the Board as a whole, the Board Committees and individual self-assessment to assess each Director’s contribution to the Board’s effectiveness. During FY2021, all Directors were requested to complete a Board Committees, Board and Individual Director Evaluation questionnaire designed to seek their views on the various aspects of the Board’s performance so as to assess the overall effectiveness of the Board. No external facilitator was used during the evaluation process in FY2021.
The responses were collated and reviewed by the NC which then makes recommendations to the Board aimed at helping the Board to discharge its duties more effectively. The appraisal process focuses on a set of performance criteria which includes the evaluation of the size and composition of the Board, the Board’s access to information, Board processes and accountability, Board performance in relation to discharging its principal responsibilities and the Directors’ standards of conduct. Following the review, the NC is of the view that the Board and its Board Committees operate effectively and each Director is contributing to the overall effectiveness of the Board.
The Board and the NC have endeavoured to ensure that Directors appointed to the Board possess the relevant experience, knowledge and expertise critical to the Group’s business.
Procedures for Developing Remuneration Policies
Principle 6: The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration.
The RC comprises three (3) Independent Directors as follows:
Mr. Wong Loke Tan (Chairman)
Mr. Siau Kai Bing
Ms. Tan Min-Li
The RC is established for the purpose of ensuring that there is a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. The overriding principle is that no Director should be involved in deciding his or her own remuneration. It has adopted written terms of reference that defines its membership, roles and functions and administration.
The duties of the RC are as follows:
No Director is involved in deciding his own remuneration, except in providing information and documents if specifically requested by the RC to assist in its deliberations.
The RC has full authority to engage any external professional advice on matters relating to remuneration as and when the need arises. The expenses of such services shall be borne by the Company. There were no remuneration consultants engaged by the Company in FY2021.
In reviewing the service agreements of the Executive Directors and key management personnel of the Company, the RC will review the Company’s obligations arising in the event of termination of these service agreements to ensure that such service agreements contain fair and reasonable termination clauses which are not overly generous. The RC aims to be fair and avoid rewarding poor performance.
Level and Mix of Remuneration
Principle 7: The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the company.
The remuneration policy of the Company is to provide compensation packages at market rates, which reward successful performance and attract, retain and motivate Directors and key Senior Management.
The Executive Directors’ and key Senior Management’s remuneration packages are based on service agreements and their remuneration is determined by having regard to the performance of the individuals, the Group and industry benchmarks. The remuneration package for the Executive Directors and key Senior Management staff are made up of both fixed and variable components. The variable component is determined based on the performance of the individual employee as well as the Group’s performance. The service agreements of the Executive Directors have been renewed for a further period of 3 years with effect from 1 July 2021. The Executive Directors do not receive Directors’ fees.
Non-Executive Director and Independent Directors are paid Directors’ fees of an agreed amount based on their contributions, taking into account factors such as effort and time spent and the respective responsibilities of the Directors. Directors’ fees are recommended by the Board for approval at the Company’s AGM.
The Company does not use contractual provisions to allow the Company to reclaim incentive components of remuneration from Executive Directors and key management personnel in exceptional circumstances of misstatement of financial results or of misconduct resulting in financial loss to the Company. The Executive Directors owe a fiduciary duty to the Company. The Company should be able to avail itself to remedy against the Executive Directors in the event of such breach of fiduciary duties.
Principle 8: The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation.
A breakdown showing the level and mix of remuneration paid/payable for the financial year ended 30 June 2021 to each individual Director of the Company is as follows:
For the financial year ended 30 June 2021, the Company only identified 1 key management personnel. Details of remuneration paid to top key management personnel of the Group (who is not Directors or CEO) for the financial year ended 30 June 2021 are set out below:
Given the general sensitivity and confidentiality of remuneration matters, the Company is not disclosing the remuneration of each Director and key management personnel of the Group. However, the Company adopts the disclosure of remuneration in bands of S$250,000 which would provide a good overview and is informative of the remuneration of each Director and key management personnel.
There were no terminations, retirement or post-employment benefits granted to Directors and key management personnel other than the standard contractual notice period termination payment in lieu of service for FY2021.
Immediate Family Member of Directors or CEO
There are two employees of the Group who are immediate family members of the Company’s Executive Directors, Mr. Ang Jun Long, son of Mr. Ang Yu Seng and Ms. Ang Ru Mei, Renne, daughter of Mr. Ang Yew Chye. The basis for determining the compensation of our related employees is the same as the basis of determining the compensation of other unrelated employees.
Details of remuneration paid to the immediate family members of Directors or CEO for the financial year ended 30 June 2021 are set out below:
Save for the above disclosure, the Company does not have any employee who is an immediate family member of a Director or CEO in the financial year ended 30 June 2021.
In view of confidentiality of remuneration matters, the Board is of the opinion that it is in the best interests of the Group not to disclose the exact remuneration of Directors and key management personnel in the Annual Report.
RISK MANAGEMENT AND INTERNAL CONTROLS
Principle 9: The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders.
The Board is responsible for the overall risk management and internal control framework, but acknowledges that no cost-effective risk management and internal controls system will preclude all errors and irregularities. The system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The internal controls in place will address the financial, operational, compliance and information technology risks, and the objectives of these controls are to provide reasonable assurance that there are no material financial misstatements or material loss and assets are safeguarded.
As the Group does not have a risk management committee, the Board and Management assume the responsibility of the risk management function. Management is responsible for designing, implementing and monitoring the risk management and internal control systems. Management reviews regularly the Group’s business and operational activities to identify areas of significant risks as well as appropriate measures to control and mitigate these risks. Management reviews significant policies and procedures and highlights significant matters to the Board and the AC.
Relying on the reports from the internal auditors (“IA”) and EA, the AC carried out assessments of the adequacy and effectiveness of key internal controls during the financial year. Any material non-compliance or weaknesses in internal controls or recommendations from the IA and EA to further improve the internal controls were reported to the AC. The AC will also follow up on the actions taken by the Management and on the recommendations made by both the IA and EA.
As the Group continues to grow and with the business environment evolving, the Board will continue to review and take appropriate steps to strengthen the Group’s overall system of risk management and internal controls. The Board and the AC also noted that all internal controls contain inherent limitations and no systems of internal controls could provide absolute assurance against the occurrence of material errors, poor judgment in decision making, human errors, losses, fraud or other irregularities.
The CEO and the Group Finance Manager have assured the Board that:
Based on the reports and work performed by both the IA and EA, the assurance from Management and the on-going review as well as the continuing efforts in enhancing controls and processes which are currently in place, the Board, with the concurrence of the AC, is of the opinion that there are adequate and effective internal controls and risk management systems in place for the Group to address financial, operational, compliance and information technology risks of the Group as at 30 June 2021.
Principle 10: The Board has an Audit Committee (“AC”) which discharges its duties objectively.
The AC comprises entirely of Independent Non-Executive Directors which are as follows:-
Mr. Siau Kai Bing (Chairman)
Mr. Wong Loke Tan
Ms. Tan Min-Li
The AC is established to assist the Board with discharging its responsibility of safeguarding the Company’s assets, maintaining adequate accounting records and developing and maintaining effective systems of internal control. The Board is of the opinion that the members of the AC possess the necessary accounting or related financial management qualifications, expertise and experience in discharging their duties. The details of the Board member’s qualifications and experience are presented in this Annual Report under the heading “Board of Directors”.
The AC has written terms of reference, setting out their duties and responsibilities, which include the following:
Apart from the duties listed above, the AC is given the task of commissioning investigations into matters where there is suspected fraud or irregularity, or failure of internal controls or infringement of any law, rule or regulation which has or is likely to have a material impact on the Company’s operating results or financial position, and to review its findings.
The AC had evaluated the performance of the EA based on the key indicators of audit quality set out in the Guidance to Audit Committees on Evaluation of Quality of Work performed by External Auditors.
The AC has full access to and the co-operation of Management and the full discretion to invite any Director or Executive Officer to attend its meetings and has reasonable resources to enable it to discharge its functions properly. The EA had unrestricted access to the AC.
The AC recommends to the Board the proposals to the shareholders on the appointment, re-appointment and removal of the EA and approving the remuneration of the EA. The AC has recommended to the Board the nomination of Nexia TS Public Accounting Corporation for re-appointment as EA at the forthcoming AGM of the Company. The Company confirmed that Rule 712 and Rule 715 of the Listing Manual of the SGX-ST had been complied with.
The AC will meet with the EA and the IA without the presence of the Management as and when necessary to review the adequacy of audit arrangements with emphasis on the scope and quality, objectivity and observation of their audit and their independence.
The AC conducted a review of all non-audit services provided by the EA and is satisfied that the nature and extent of such services does not prejudice the independence and objectivity of the EA. For the financial year ended 30 June 2021, the fees that are charged to the Group by the EA for audit services were approximately S$140,000 There were no non-audit fees paid to the EA.
Anti-Bribery Compliance Policy
The Group has implemented an anti-bribery compliance policy to demonstrate its commitment and has provided standards of conduct for employees and third-party representatives to conduct its businesses in a professional, fair, ethical manner and in compliance with anti-bribery and corruption laws in the various jurisdictions in which the Group has its business presence.
As of to-date, there were no reports received through the anti-bribery channels.
Fraud Risk Management Policy
The Group has implemented a fraud risk management policy to prevent, detect and respond to incidents of fraud. Any acts of fraud committed by employees or parties may face consequences such as disciplinary warnings, termination of employment or other contractual relationship, and be reported to the appropriate law enforcement or regulatory body.
Fraud risk assessment, fraud communication and training, background and due diligence checks are preventive measures taken by the Group to detect fraud.
This policy is reviewed at least annually and revised, where applicable, to meet the changing needs of the Group.
As of to-date, there were no incidents of fraud detected.
The Group also has implemented a whistle blowing policy whereby accessible channels are provided for employees to raise concerns about possible improprieties in matters of financial reporting or other matters which they become aware and to ensure that:
As of to-date, there were no reports received through the whistle blowing mechanism.
The AC is kept updated annually or from time to time on any changes to the accounting and financial reporting standards by the EA. No former partner or director of the Company’s existing auditing firm has acted as a member of the AC.
Internal Audit Function
The Company has outsourced its internal audit functions and has appointed a professional firm, Ardent Business Advisory Pte. Ltd. as the IA. The IA reviews the effectiveness of internal controls as directed by the AC. Procedures are in place for the IA to report independently on their findings and recommendations to the AC for review. Management will update the AC on the status of the remedial action plans. The IA has unfettered access to all the Company’s documents, records, properties and personnel, including access to the AC.
The AC approves the hiring, removal, evaluation and compensation of the internal audit function which the IA is outsourced. The AC also annually reviews the adequacy and effectiveness of the IA to ensure that resources are adequate and that the internal audits are performed effectively.
The AC is satisfied that the internal audit function is staffed by suitably qualified and experienced professionals with the relevant experience to perform its function effectively.
Shareholder Rights and Conduct of General Meetings
Principle 11: The company treats all shareholders fairly and equitably in order to enable them to exercise shareholders’ rights and have the opportunity to communicate their views on matters affecting the company. The company gives shareholders a balanced and understandable assessment of its performance, position and prospects.
The Company does not practise selective disclosure. In line with the continuous obligations of the Company under the SGX-ST Listing Manual and the Companies Act, Chapter 50, the Board’s policy is that all shareholders should equally and on a timely basis be informed of all major developments that impact the Group via SGXNet.
Shareholders are informed of general meetings through the announcements released to the SGXNet and notice contained in the annual report or circulars sent to all shareholders. These notices are also advertised in a national newspaper. Shareholders are also informed on the procedures for the poll voting at the general meetings. All Shareholders are entitled to attend the general meetings and provide the opportunity to participate in the general meetings. If any Shareholders are unable to attend, he/she is allowed to appoint up to two proxies to vote on his/her behalf at the general meeting through proxy forms sent in advance. The Company’s current Constitution does not include the nominee or custodial services to appoint more than two proxies.
On 3 January 2016, the legislation was amended, among other things, to allow certain members, defined as “Relevant Intermediary” to attend and participate in general meetings without being constrained by the two-proxy requirement. Relevant intermediary includes corporations holding licenses in providing nominee and custodial services and CPF Board which purchase shares on behalf of the CPF investors.
The shareholders are encouraged to attend the Company’s general meetings to ensure a high level of accountability and to stay informed of the Group’s strategies and growth plans. Notice of the general meetings are dispatched to shareholders, together with explanatory notes or a circular on items of special businesses (if necessary), at least 14 clear calendar days before the meeting. The Board welcomes questions from shareholders who wish to raise issues, either informally or formally before or during the general meetings.
Each item of special business included in the notice of the general meetings will be accompanied by explanation of the effects of a proposed resolution. Separate resolutions are proposed for each substantially separate issue at general meetings.
All Directors, including the Chairman of the AC, NC and RC are normally present and available to address questions relating to the work of their respective Board Committees at general meetings. Furthermore, the EA is present to assist our Board in addressing any relevant queries by our shareholders.
The Company will make available minutes of general meetings to shareholders upon their request.
The Company acknowledges that voting by poll in all its general meetings is integral in the enhancement of corporate governance. The Company adheres to the requirements of the Listing Manual of the SGX-ST and the Code where all resolutions at the Company’s general meetings held on or after 1 August 2015, are put to vote by poll. The detailed results of each resolution are announced via SGXNet after the general meetings. The Company has adopted electronic polls for all resolutions noted at the AGM held in FY2020.
The Company will publish the minutes of general meetings of shareholders on both the SGX website via SGXNet and the Company’s website as soon as practicable.
The Group does not have a concrete dividend policy at present. The form, frequency and amount of dividends declared each year will take into consideration the Group’s profit growth, cash position, positive cash flow generated from operations, projected capital requirements for business growth and other factors as the Board may deem appropriate. For FY2021, the Board has recommended a final dividend of 4.0 cents per share which is subject to shareholders’ approval at the forthcoming AGM of the Company.
ENGAGEMENT WITH SHAREHOLDERS
Principle 12: The company communicates regularly with its shareholders and facilitates the participation of shareholders during general meetings and other dialogues to allow shareholders to communicate their views on various matters affecting the company.
The Company believes in high standards of transparent corporate disclosure and is committed to disclose to its shareholders, the information in a timely and fair manner via SGXNet. Where there is inadvertent disclosure made to a selected Group, the Company will make the same disclosure publicly to all others as soon as practicable. Communication is made through:-
By supplying shareholders with reliable and timely information, the Company is able to strengthen the relationship with its shareholders based on trust and accessibility.
To enable shareholders to contact the Company easily, the Shareholders may reach the Corporate Marketing & Finance Team of the Company at the registered office of the Company and the contact details are set out in the corporate information of the Annual Report as well as on the Company’s website.
MANAGING STAKEHOLDINGS RELATIONSHIPS
Engagement With Stakeholders
Principle 13: The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served.
The Company acknowledges the importance for establishing effective communication among the stakeholders through regular engagement and various communication platforms to achieve mutually beneficial goals.
The Company has identified five key stakeholders’ groups, namely, the shareholders and investors, customers, suppliers, employees and public and communities. The Company’s approach to the engagement with key stakeholders and materiality assessment were disclosed in the Company’s Sustainability Report for FY2021 where the Company would continue to monitor and improve to ensure that the best interest of the Company.
The Company does not practice selective disclosure. Price sensitive information is first publicly released through SGXNet, either before the Company meets with any investors or analysts. All shareholders of the Company will receive the annual report with notice of AGM by post and published in the newspapers within the mandatory period, which is held within four months after the close of the financial year.
To promote regular, effective and fair communication with stakeholders, the Company maintains a corporate website at "http://www. unionsteel.com.sg through which stakeholders are able to access up-to date information on the Group. The website provides annual reports, financial information, stock information, profiles of the Group, and contact details of the investor relations of the Group.
In compliance with Rule 1207(19) of the SGX-ST Listing Manual, the Company has adopted a Code of Best Practices to provide guidance to its officers on securities transactions by the Company and its officers.
The Company and its officers are not allowed to deal in the Company’s shares during the period commencing two weeks before the announcement of the Company’s financial results for the first half year of its financial year, and one month before the announcement of the Company’s full-year financial results and ending on the date of the announcement of the relevant results.
Directors and executives are also expected to observe insider-trading laws at all times even when dealing with securities within the permitted trading period or when they are in possession of unpublished price-sensitive information and they are not to deal in the Company’s securities on short-term considerations.
There were no material contracts of the Company and its subsidiaries involving the interests of the CEO, each Director or controlling shareholder, either still subsisting at the end of the financial year or entered into since the end of the previous financial year.
The Company has established a procedure for recording and reporting interested person transactions (“IPTs”). All IPTs are subject to review by the AC to ensure that they were conducted on normal commercial terms and are not prejudicial to the interests of the Company and its minority shareholders.
There were no IPTs and any of its interested persons (namely, Directors, CEO or controlling shareholders of the Group or the associates of such Directors, CEO or controlling shareholders) subsisting for the financial year ended 30 June 2021.
PARTICULARS OF DIRECTORS PURSUANT TO THE CODE OF CORPORATE GOVERNANCE
ADDITIONAL INFORMATION ON DIRECTORS NOMINATED FOR RE-ELECTION — Pursuant to Rule 720(6) of the Listing Manual of the SGX-ST, the information as set out in Appendix 7.4.1 of the Listing Manual of the SGX-ST relating to Mr Siau Kai Bing and Ms. Tan Min-Li, being the Directors who are retiring in accordance with the Company’s Constitution at the forthcoming AGM, is set out below: